Category: Governance
November 12th, 2009
Enterprise 2.0: What do we know today about moving our organizations into the 21st century?
We spend 60-80% of our time in the workplace on interaction and collaborative activity. This week in Frankfurt at the Enterprise 2.0 SUMMIT and last week at the inaugural Enterprise 2.0 Conference West in San Francisco has been an good microcosm of the state of the industry.
It does appear that we’re entering a new stage in the maturity of enterprise social computing. The good news: Most of the lessons learned are good ones, yet as we’ll see, some challenges remain.
Based on my conversations with practitioners and thought leaders here and the many discussions over the last two weeks, the practice of Enterprise 2.0 has effectively moved beyond the initial novelty of years past. There’s now a much more practical focus on how to create, manage, and govern social business communities, the specific ways to deliver measurable business value, and most of all, a desire to learn what works best (or not) in the realm of collaboration and social software.
The broad outlines of what it actually takes to apply new social business models have emerged lately along with the techniques to deliver on them successfully in the longer term. In particular, these include topics such as business case, tool selection, worker policies, community management, and the governance of social business environments.
Just as importantly, we are also starting to see customers implementing Enterprise 2.0 in scale. These typically include enterprise social networking, wikis, and social CRM. This is different than a year ago when there were only a handful of stories about Fortune 1000 and Global 2000 companies seriously exploring the potential benefits of social computing.
In the sense that the hard work has started, we are also seeing the end of the beginning for Enterprise 2.0. We’ve learned a lot along the way, particularly from early adopters, and it has been interesting to participate back-to-back in two of the largest enterprise social computing events of the season. This has helped get a sense of what’s taking place in Europe and North America with customers as well as the industry growing up around Enterprise 2.0 in terms of tools and services.
Related: Social applications are now well-entrenched in enterprise networks around the globe
Where is Enterprise 2.0 headed?
Here are my top takeaways from the discussions, research, and findings here in Frankfurt this week and San Francisco last week:
- Businesses are actively seeking information about how best to implement Enterprise 2.0. While last year they were kicking the tires and evaluating what the benefits are (establishing why) there’s a lot more actual project activity this year and this is driving significant demand for knowledge about how. The rise of the 2.0 Adoption Council is one demonstration of this need to share information about what works. Further providing evidence that there’s a need for how: A recent survey showed that 36% of their members were currently managing multi-million dollar budgets this year for Enterprise 2.0. In other words, they’re in the “how” stage. Finally, the end-users I talked with in my workshops at both events demanded detailed, specific information about how to make Enterprise 2.0 work for their businesses.
- There is still lots of debate about how to
September 17th, 2009
Going beyond the hype: Identifying Enterprise 2.0 best practices
There’s been plenty of discussion recently in the blogosphere, including here, about the successes and challenges of Enterprise 2.0 projects. But there’s still just a rough general sense of what it really takes to create an effective collaborative community using social tools.
It’s starting to become clear that successful Enterprise 2.0 efforts have community management as a core function. Stewart Mader’s guest post this week on Dennis Howlett’s blog here on ZDNet helps tell part of this story: As businesses go about their daily activities, they aren’t looking for either Enterprise 2.0 or a social tool like a wiki for its own sake. Instead, they are looking to solve problems and meet their deadlines in easier, cheaper, and better ways. To the extent that social computing can help do this, it will remain a topical subject in business and IT. To the extent that it’s a distraction, a risk, or more overhead, it won’t.
Those trying to read the tea leaves about Enterprise 2.0 these days can see that the software at least has arrived in a bare majority of companies, even if it’s just Facebook or Twitter across the firewall. Genuine adoption and meaningful integration into business processes has certainly happened in a number of organizations, but is still the edge case today rather than the rule. That’s not to say the current case studies aren’t reporting gains, they generally are. But the message here is that many enterprises are now actively in full contact with the social computing world, whether they want to or not, and now it’s time to understand how to deal with the benefits and issues.
What does seem to be emerging are the first broad outlines of a body of knowledge on how to make social computing work in a business setting. So-called best practices and effective techniques are beginning to be identified and understood. And if one accepts that some level of adoption of social tools is inevitable in most workplaces (just not that big an “if” these days), then understanding how to manage the upside while dealing with any potential downsides of Enterprise 2.0 just makes good business sense.
The advent of most new technology improvements to business ultimately get codified into frameworks or methodologies, big formal sounding words that just refer to systematic ways of identifying and applying methods in a given discipline. This helps identify and organize practices that work and ones that don’t by ensuring new efforts don’t have to reinvent the wheel each time. The first social software and Enterprise 2.0 methodologies are now beginning to emerge, some explicitly but most implicitly, as practitioners assess their early successes and try to understand what worked and what didn’t.
Emerging best practices in social software
The last couple of years has seen a steady, conscious effort to collect and codify social computing techniques and best practices. These include:
- Andrew McAfee’s attempt to create a pattern language for Enterprise 2.0.
- Stewart Mader’s excellent Wikipatterns.
- Sun’s well produced Social Software Pattern Language.
- The social patterns captured in Designing Social Interfaces by Christian Crumlish and Erin Malone and probably best summarized here.
But while these efforts are laudable and often extremely useful when designing social software or structuring online communities, they often lack
September 2nd, 2009
Enterprise 2.0: Finding success on the frontiers of social business
It’s entirely possible something may cause social tools to abruptly stop their broad movement into the workplace, but history tells us that it’s just not likely. Success is in the eye of the beholder and with it often spawns a growing body of followers, adherents, acolytes, as well as nay-sayers that won’t be convinced until it’s an inescapable conclusion. In this very manner, at least so far, seems to go Enterprise 2.0, a moniker for corporate social software that has been inspired by widely popular online Web 2.0 tools such as blogs, wikis, social networks, and other social software.
As we’ll see, this is an intriguing case of a nascent business, social, and technology movement that seems to — despite some claims to the contrary — actually have had a rather humble and unheralded ascent while making surprisingly deep inroads in business including some higher profile successes. Make no mistake however, despite the apparent numbers, this is a movement that’s in its early days yet and which has years — if not a decade or more — before it has its largest impact.
What exactly the impact of Enterprise 2.0 will be however, has been the subject of an active and lively debate online over the last couple of weeks.
Uptake moving faster than absorption
My recent exploration of the potential causes of Enterprise 2.0 failures here on ZDNet managed to spark quite a discussion in the blogosphere about enterprise social computing and its overall appropriateness, motivations, and benefits to business. In particular, well-known contrarian Dennis Howlett weighed in last week with fairly severe criticism of Enterprise 2.0 which ultimately resulted in a direct response from Andrew McAfee today (who described it originally). For those wanting to follow the rest of the conversation, Paula Thornton probably did the best round-up of the discussion. The range of responses shows a wide variety of opinion reflecting both the scope and timeliness of this subject.
For my part, I would observe that the points that Dennis makes, while resounding with business importance (and being a bit disingenuous since I believe Dennis knows better given the information available), almost completely ignores the discussion and experiences with Enterprise 2.0 up to this point. This includes both the extensive efforts taking place in companies around the world right now as well as the already widespread nature of these tools. Far from being a solution waiting for some kind of business problem, at present Enterprise 2.0 describes a new way of working together that is already being used by millions of workers every day.
Figure 1: Stats, Adopters, and Motivation
That not every Enterprise 2.0 effort will benefit the business is also certainly true, as it’s occasionally misapplied and overused, like any new business or technology idea. However, the many people finding value in these tools today or who are working hard to make them successful are poorly served by broad generalizations, that for some reason, Enterprise 2.0 “is a crock.” That it’s not a well-known term is certainly true; most people using social tools at work are just doing it and not giving it a name. This does not distract from the numerous stories of success that have emerged over the last few years.
As JP Rangaswami pointed out recently, social computing is increasingly moving beyond the perception of being “interesting, but of no commercial value” and into a place where it’s thought to provide a range of bottom-line business results for most that apply it.
In working with and examining the results of many early Enterprise 2.0 efforts, I’ve been forced to come to the conclusion through repeated example that there is something fundamentally unique and powerful about social computing. Though not all uses of social tools result in rapid adoption or instant results, those that establish an early network effect can and do push existing IT systems (often ECM, knowledge management, and communication tools) into rapid irrelevance or completely upend and replace older, less dynamic databases or information repositories in surprisingly short amounts of time. That this almost always happens with just minor disruption is fascinating to me. And as we’ll see below, despite Dennis’ skepticism, these emergent tools have a rich and wide set of use cases. In the end, senior managers that may not “give a damn” about the emergent nature of the enterprise do in fact care about better ways of running their businesses.
That there is such a wide range of positions about Enterprise 2.0 from highly experienced people inside the worlds of technology and business is intriguing but probably inevitable due to the early stages of these changes and their rapid onset. In large part, I believe this is because of the distributed and muted nature of the information about what’s happening with social computing inside the workplace (this is in contrast with B2C-style corporate social media, which is still getting the lion’s share of buzz and attention right now.) Many projects are also adopting early advice and aren’t heralding the massive change that these tools may bring, are flying under the radar, and setting expectations low in a business world that is fatigued with the failures of big-bang IT. That adoption is happening as fast as is apparent today is intriguing given the warning that McAfee himself makes about expecting too much change from all of this:
[C]ertain E2.0 enthusiasts adopt the language of revolutionaries. They rail against the old corporate order and proclaim that they’re working for its downfall. They portray hierarchy, standardization, and management as enemies of innovation, creativity, and value creation. And they maintain that E2.0 is an unstoppable force that will only gain power as Millennials enter the workforce and that resistance to it is, ultimately, futile.
McAfee does point out that he indeed believes that those organizations without these tools will eventually fall behind, but he notes it generally won’t happen that quickly.
So while revolution is almost invariably not taking place in organizations adopting social computing tools, the pace of uptake has actually been quite impressive given the rate at which enterprises typically adopt new technologies (translation: usually with glacial pace compared to the consumer world). The numbers and profiles tell the story as you can see in the State of Enterprise 2.0 visual above. While a “disruptive revolution” is not what’s happening, and Enterprise 2.0 is certainly not inevitable for most organizations (yet), the adoption of the tools has in fact been taking place at what some would call near-revolutionary velocity, including the number of companies reporting they are consciously engaging in it as some level.
Although I’ve been following Enterprise 2.0 closely since 2006 and I’m generally known as an advocate, I should be clear that I’ve also tried very hard to be impartial and balanced (hence, for example, my Enterprise 2.0 failures post). No one is served by unrestrained hype. As much as possible, I have gathered data and examined the trends to see if indeed 1) the tools of Web 2.0 have begun to move into the enterprise and 2) improve business results. The first is now virtually a foregone conclusion; we are clearly beyond the
August 21st, 2009
14 Reasons Why Enterprise 2.0 Projects Fail
Creating and nurturing a community is not something at which traditional stakeholders in software projects are often skilled. I’ve been having some very interesting conversations lately about Enterprise 2.0 failures with ZDNet colleague Michael Krigsman. He is doing research for his work on project failures in this area and is trying to understand the reasons why some Enterprise 2.0 initiatives don’t succeed. In preparing for our talk together, I ended up doing quite a bit of my own research and the results, at least for me, surfaced some fascinating stories and insights that are worth examining examining here in detail.
It’s a classic adage that we usually learn more from our failures than from our successes. Success itself has a palliative effect that makes one less introspective and over-confident of one’s methods. It obscures the feedback loops needed to really understand what worked and what didn’t. When you succeed at something, clearly what you did was effective, but you can never quite be as sure what it was as when something doesn’t work out. I’ve find this line of reasoning with Enterprise 2.0 failures to be fascinating because of how very different it’s often turning out to be from traditional IT projects.
For one, IT doesn’t seem to be in the driver’s seat nearly as much with Enterprise 2.0. In fact, the initiative is frequently coming from the business side. Two, as the latest case studies emerge and are analyzed, it is grassroots efforts that often end up being the most successful, bubbling up and then across the organization, only then to be formally adopted later. And three, many so-called Enterprise 2.0 projects are local, unblessed, informal uses of social computing software which — by their very nature — are less compliant with enterprise technology standards, legal/HR guidelines, and corporate policy. So, at least on its face, this seems to mean Enterprise 2.0 projects are more likely to fail due to seeming larger than usual lack of alignment and organizational backing.
Intriguingly, that this is a bad thing is quite debatable in the case of Enterprise 2.0. In an ideal world, you’d like to see projects that aren’t successful fail quickly and not consume a huge investment of time and money before you discover that they aren’t going to produce value. The mantra here is “fail fast and often” and then look for the ones that don’t. Just as interesting, the projects that break the rules, can often break the right rules; the ones that were going to hold back the more structured and official efforts anyway. The point here is that many Enterprise 2.0 tools are often used widely in organizations without tacit approval.
Venture Model + Rogue IT = Enterprise 2.0 Success?
In other words, people are just grabbing tools off the Web and putting them to work, drawing their co-workers in as they begin to use them. As we saw this year, most organizations now have the tools of Enterprise 2.0: blogs, wikis, and social networks and the workers have access to them. The amount of rogue IT that actually takes place varies widely by organization, but seems to be on the rise particularly with social tools. Access to them is very easy via the Internet and I hear frequently now from organizations that this is happening.
Most of these smaller, on-the-ground, often under-funded Enterprise 2.0 efforts will fail to thrive for whatever reasons. These are useful experiments but they were missing
August 18th, 2009
Using social software to reinvent the customer relationship
The elimination of decades of inadequate communication channels will suddenly unleash a tide of many opportunities, as well as challenges, for most organizations.As Web 2.0 applications move more deeply into the strategic operations of enterprises, a unique hybrid of social software has emerged to help businesses deal with the giant sea of customers that awaits them on the other side of the network. While Enterprise 2.0 tools, primarily aimed at collaboration, are certainly part of this story, they often don’t help companies enjoy the full range of possibilities when it comes customer-facing social computing.
Enter the rapidly emerging Social CRM space, an area that’s become significant enough that there’s now a dedicated blog on the subject here on ZDNet by the terrific Paul Greenberg.
This year’s rise of enterprise social computing is opening a new front line in many businesses where the old ways of engaging with customers is no longer sufficient or even competitive. Many organizations I talk to these days are now evaluating the way social software seems to be altering the CRM landscape. In particular, Social CRM has recently come into its own as a leading model for this transformation. For comparison’s sake, online customer communities were a very hot topic last year in this same space, but as I pointed out then, it was surprisingly hard to create them repeatably. My sense is that Social CRM will be a more predictable, reliable model for applying Web 2.0 to customer relationships using many of the strengths of the community model.
Read Michael Krigsman’s 3 Big Reasons CRM Initiatives Fail
This is not to say that many of the social media tools that companies have deployed already aren’t good examples of Social CRM. Many of them are and this highlights a major discussion in the blogosphere last week sparked by SocialText’s Ross Mayfield, who posited that with Social CRM, the people are the platform. The key point here is that where online tools let customers have a social relationship with a business — in other words, interaction that is visible to them and other customers whenever possible — then some Social CRM is taking place. Without a fundamentally community-based relationship, you’re just back to traditional, one-on-one push management of customers. This latter model, a closed and asocial mode of customer interaction, is the very antithesis of Social CRM.
Social CRM: It’s all about people
For its part, Social CRM paints a vision of creating a deeper and more engaging community-based relationship with your customers, instead of the traditional approach of managing them, in a very Cluetrain Manifesto way. Part online community, part crowdsourcing, part customer service, Social CRM can create an emergent, collaborative online partnership with customers that can result in an array of improvements to business performance.
Far from being just for the benefit of the business however, with Social CRM customers tend to 1) be much more in control, 2) are in sustained contact with the organizations they care about, and 3) can use self-service, mutually visible participation, collective history, and peer relationships to assist each other as much — and often much more — than the classic CRM model ever could.
But like any composite, heterogeneous group of participants, Social CRM necessarily entails less deterministic control and outcomes. For example, these new Social CRM tools will let anyone ask a question publicly and anyone else in the community (customers or employees) answer it. Or provide a means to let new ideas flow in from the community in a very Dell IdeaStorm fashion. The question of who decides what the right “official” answer is, or which ideas will be selected and how non-employee submitters will be compensated are currently hard questions to answer for many organizations.
Then there is the challenge that by its very nature Social CRM is
August 5th, 2009
The future of enterprise data in a radically open and Web-based world
Like many aspects of applying Web 2.0 to the enterprise, the challenge is both in adapting the business and its thinking while successfully leveraging the latest delivery methods.In recent months, another significant front in the growing trend of open data has emerged, and with it a growing focus on what businesses can do with that most precious asset they’ve developed at enormous expense over the years: their data.
The advent of a new administration in the United States, which has been pushing to open U.S. government databases en masse, and a proliferation of open data initiatives in other countries — perhaps most notably in the U.K. — has put the often behind-the-times government world into the forefront of open data with such sites as data.gov, which the nation’s CIO Vivek Kundra has promised will have tens of thousands of feeds this year alone.
Open data holds up the promise of instant connectivity between arbitrary numbers of ad hoc partners while at the same time reducing integration costs, improving transparency, harnessing external innovation, and even (perhaps especially) creating entirely new and significant business models. I sometimes refer to these as “open supply chains“, and the term is highly descriptive when it comes to the potential for open data models to make cloud computing safe and interoperable, help journalists to do their jobs better, or create multi-million dollar new lines of business, such as Amazon’s well-known Web Services division.
All of this activity underscores the relatively lackluster track record of traditional businesses in understanding and managing the opportunities, risks, and rewards of open data. Despite some significant success stories there is an apparent — and perhaps widening — digital divide between the classical world of business and the online world.
Even the considerable investments that most large organizations have made in IT system interoperability and integration, particularly with such popular approaches such as service-oriented architecture, have produced famously lackluster results. My good friend David Linthicum, a leading SOA expert, has gone as far as saying that the lack of focus on data is a major part of the problem.
Taking a product focus instead of a project focus
For those that have embarked down the open data road to see where it leads, one thing seems to be clear: Exposing data — whether it is internally within an organization or outside to partners, or even the whole world — is a way of thinking about the very nature of the business, more than it is about achieving a one-off end goal. This is because open data seems to create immediate, close, and powerful relationships between the publisher and the consumer of the data, and leads to a series of unexpected outcomes. These relationships can be created with extreme ease with today’s methods over networks like the Web and though often speculative, a good subset of them form rapidly into important ones that can draw in new customers, identify new innovations, head off competitors, or just generate revenue. Witness Twitter and its hundreds of partners accessing the platform (and its enormous audience) through its API or Netflix and its impressively successful prize contest that opened up data selectively to dozens of high-value self-selected contributors as a leading example.
Read about emerging open business methods for more open data success stories.
In other words, in order to be competitive with the next generation of businesses, most organizations are going to have to look at open data for reasons involving efficiency, competitiveness, and long term health, particularly as open data enters their particular industry.
Enterprise open data options: Leveraging today’s Web best practices
But it’s still not clear to businesses the options they have and how they need to think about opening up strategic sets of data for reuse internally, with their partners, and indeed, with the rest of the world. Far from being a story about IT plumbing, open data is a way of doing business, forging strong relationships over the network with other organizations, customers, and potential customers. However, the success of the Web itself as a dominant global platform has made it the de facto channel for providing open data, even the networks internally to most businesses heavily use Web technology for their applications, intranet, and interaction with the rest of the world. This means opening data generally means opening it up over the Internet using Web technology and approaches.
So critically, being successful with enterprise open data requires
June 13th, 2009
Running your SOA like a Web startup
One of the more striking differences between IT and the online world these days is the contrast between traditional enterprise service-oriented architecture and its equivalent on the Web, open APIs. More and more lessons are coming from the online space, providing key insights into how we might invigorate the way we open up our IT systems for maximum value.
SOA does not have the same business urgency and lacks critical focus in this regard in most organizations. So while some new data shows that 75% of all large enterprises will be using SOA by the end of this year (and 60% will even be expanding it), the most obvious successes with service-oriented approaches aren’t classical organizations at all. They are Web companies that offer APIs out of a basic need: To build a network of partnerships quickly and cheaply as well as tap into external innovation and inexpensive 3rd party investment.
A quick examination of Google News shows several useful new public-facing Web services (aka open APIs) that were announced this week, including one for Microsoft’s Bing as well as from smaller companies like School Loop, which just launched an API that “lets gradebook and assessment systems pull data–such as rosters and assignments–from School Loop and write scores into the School Loop gradebook for display to parents, teachers, students, and other stakeholders.” Both of these APIs let anyone, anywhere build applications that interact with and incorporate their respective capabilities.
These are just two typical examples of more than 40 new APIs that were released to the world over the last 30 days alone, according to Programmable Web’s API dashboard, currently the most reliable source for such information. This pace of release is fairly steady: A “global SOA” is growing up around us on the Web.
Joe McKendrick recently asked here on ZDNet if we needed an iTunes model for Web services. The reality is, it already exists — albeit in Web-friendly, simple form — and not in the failed visions of UDDI directories of yore, but in the pragmatic release of hundreds and hundreds of new APIs every year.
SOA and Open APIs: Close Cousins
Now, it’s also true that SOA initiatives in large companies generally don’t publicly announce their internal developments, so it’s much harder to get a sense of what is being created and used in most organizations. However it’s fairly clear that there are some significant differences and outcomes between these two approaches for open services, even as they ostensibly have the same goals on the face of it: To encourage interoperability between different business systems and enable opportunities that would otherwise be too difficult, expensive, or time-consuming to capture.
What’s especially intriguing about these two sides of the same coin are the innate assumptions that they make: SOA is usually an overhead effort (thought it can also be done on the ground) between IT and the business which ultimately allows businesses to achieve improved results and even serendipitous outcomes when it comes to the integration and leverage of existing investments in systems and data. The ROI is very often hard to measure and rapid improvements to the business are usually not the norm. SOAs also tend to be more inward facing and designed for internal consumption.
Contrast this with open APIs, in which the API is considered of primary strategic advantage to the business. The view is the investment in the development of an API is warranted because of immediate benefits that can be gained: increased reach to new customers on the network, tapping into external innovation, increased 3rd party investment, and a scalable model for 3rd party relationships. Interestingly, the bigger the organization, the more value an API has to offers to existing and potential partners, primarily because of the data tends to be richer and more valuable and/or the functionality it exposes is world-class through the success of the enclosing business. This is a vision where a service-oriented business channel (open APIs, not Web pages) often becomes the dominant channel for interaction with their customers as it arguably has for market leaders such as Amazon, Twitter, and others. Unlike most SOA efforts, APIs also tend to be designed for consumption by the broader world, though they are certainly used internally as well.
In would be a gross oversimplification to say that SOA is a technical approach to solving a outstanding set of business problems and open APIs are a business solution that uses a technical approach, but increasingly that seems to be the case. A couple of years ago I asked if it was the timing was right for businesses to open up to the cloud particularly since a near majority of CIOs were clamoring for it. For more enterprises, that just hasn’t happened, leaving strategic gaps in execution that has helped lead to the recent discussions about the possibility of the quiet death of SOA.
These points highlight a key difference between
June 5th, 2009
Eight ways that cloud computing will change business
When a major change arrives on the IT scene it’s not always clear what the implications will be, if any, and so for large organizations a risk-managed wait-and-see attitude tends to prevail. Occasionally however some shifts offer cost savings, improvements to operations, or ways to tackle business problems that offer significant strategic advantage. The larger the benefit in one or more of these areas, then the more strategic the advance is and the greater potential it will impact the bottom line.
Cloud computing is quickly beginning to shape up as one of these major changes and the hundreds of thousands of business customers of cloud offerings from Amazon (Amazon Web Services), Salesforce (Force.com), and Google (many offerings, including Google App Engine), including a growing number of Fortune 500 companies, is showing both considerable interest and momentum in the space.
Cloud Computing: A delicate balance of risk and benefit
To be clear, there are currently unanswered questions and inherent challenges — even some major risks — in adopting cloud computing for more that so-called “edge” computing of minor applications and non-critical business systems. Notably, these include security of enterprise data that stored in the cloud, risk of lock-in to cloud platform vendors, loss of control over cloud resources run and managed by someone else, and reliability.
On the other side of the coin are some benefits that can potentially change the game for many firms that are willing to be very proactive in managing potential downside. These include access to completely different levels of scale and economics in terms of the ability to scale very rapidly and to operate IT systems more cheaply that previously possible. Easier change management of infrastructure including maintenance and upgrades (cloud vendors extensively virtualize and commoditize the underlying components to make them non-disruptive to replace and improve) as well as offering improved agility to deploy solutions and choice between vendors, particularly when cloud interoperability becomes more of a reality than it is today. Cloud computing also offers an onramp to new computing advances such as non-relational databases, new languages, and frameworks that are designed to encourage scalability and take advantage of new innovations such as modern Web identity, open supply chains, and other advances.
In fact, cloud computing holds the potential to dramatically change the businesses that adopt it, even if the technologies are only used internally. While these possibilities are only now starting to become clear, we can get a decent sense of these now:
8 ways that cloud computing will change business
- The creation of a new generation of products and services. The economics of cloud computing lets innovative companies create products that either weren’t possible before or are significantly less expensive than the competition (or just more profitable.) This part of cloud computing is an arms race and there are short windows of opportunity since competitors can often put the economic advantages of cloud computing into their product formulations fairly quickly once they see that it works for you. Where it gets interesting is that many business ideas that required prohibitive amounts of computing power, scale, or radically new business models (the aforementioned open supply chains and Global SOA) but couldn’t be implemented due to existing technical limitations or cost-effectiveness, can now be realized. Every improvement in storage, processing power, or technology enables innovations that weren’t possible before (high speed Internet, for instance, made products like YouTube possible) and cloud computing makes these opportunities unusually accessible. Smart companies will take notice.
- A new lightweight form of real-time partnerships and outsourcing with IT suppliers. Companies that did traditional outsourcing of their IT services a few years ago already know what this feels like; a large part of what used to be in-house is now being done somewhere else and changing anything is hard. But unlike traditional outsourcing of IT, cloud computing will provide agility and control that traditional outsource cannot match for the most part. Don’t like your cloud vendor? Unless you negotiated a long-term contract, you can often switch far easier than changing IT outsourcers. In fact, many cloud computing relationships consist of nothing more than a cancel-at-the-end-of-the-month commitment and corporate invoice. For many companies, this will actually be improvement over what they have now and give them choices they perhaps never had when everything required internal execution or to go through the outsourcing supplier relationship.
- A new awareness and leverage of
March 3rd, 2009
Cloud computing: A new era of IT opportunity and challenges
It doesn’t take long to get a good feel for the potential of cloud computing and how it can offer ready access to entirely new business capabilities, less expensive IT resources, and unrivaled flexibility for businesses of every size. Since becoming a hot topic early last year as major vendors, including top firms such as Amazon, Google, and Microsoft, jumped on the bandwagon with a wide-range of offerings, cloud computing has consistently stayed on the industry’s radar. One of the bigger challenges IT departments will face this year is whether they can take the plunge with cloud computing quickly enough to benefit their organizations as a whole.
With leading companies still joining the movement — including IBM, HP, and Salesforce — cloud computing has moved from a cottage industry to one of the bigger growth areas in the computing business, just as the industry as a whole begins to take serious lumps from the recession.
The onus is now on businesses to take advantage of cloud computing to cut costs and become more agile. In the process, they will have some hard choices to make — and some intriguing ones as well — if they want to access the many advantages that cloud computing platforms can provide.
There are also some non-trivial challenges involved in adopting cloud computing that must be watched closely as well. These includes a long list of issues such as the security and privacy of business data in remote 3rd party data centers, the dreaded concerns about platform lock-in, worries about reliability/performance, and even fears about making the wrong decision before the industry begins to mature.
However, in a business environment where change is almost mandatory in order to survive, cloud computing appears to offer significant economic benefits if the risks can be offset. Hence, one of the bigger challenges IT departments will face this year is whether they can take the plunge with cloud computing quickly enough to benefit their organizations as a whole.
ZDNet’s own Phil Wainewright has covered some of the more interesting issues swirling around cloud computing of late including the default lock-out that occurs in the event of the demise of a cloud computing provider as well as the brewing SLA battles between the major providers. This underscores how the cloud computing space is where the new platform wars are forming and it’s sizing up to be as big or bigger than earlier ones. The good news for now: In a wide-open new industry, there is no clear leader today and choice prevails.
This brings up the side discussion of what actually constitutes cloud computing, since everyone seems to be applying the label to anything that runs on the network. Is it Web hosting of your application code? Is it a software platform as an on-demand service? Do SaaS applications count as cloud computing? The answers to all these questions are a qualified yes; the answer hovers roughly around the outsourcing of computing of any kind (CPU, storage, apps, etc.) using a shared cost, commodity utility model. In general, you know if you’re involved with cloud computing of some kind if you’re receiving a bill for computing services being done for you somewhere else but which you can access directly.
I used the term commodity utility model since cloud computing providers aren’t monopolies today (unlike a lot of the other utility services we use in business) and currently compete actively with each other on features and pricing. This means that CPU cycles, bandwidth, and application logins in the cloud will be extremely cheap and extensively commoditized for the foreseeable future. This constant competition creates continuous pressure to drive down the costs and increase the capabilities of cloud computing platforms in a way that just doesn’t happen naturally within IT organizations today. In other words, just like most businesses don’t generate their own power or create their own financial institutions to keep their money in, increasingly they won’t keep their computing in largely parochial, private capabilities that can’t leverage the economies of scale, innovation, and efficiencies of dedicated providers.
Enterprise cloud computing: Some assembly required
As a new industry, there is a lot of choice in cloud computing today and will continue to be more until the inevitable shake-out occurs and the winners begin to emerge. That also means there is no dominant model for how cloud computing should be delivered and this is resulting in some interesting fragmentation in the market already. Some cloud computing offerings are so generic (Amazon’s Elastic Compute Cloud, aka EC2) that they are nothing more than sophisticated on-demand hosting services while others offer nearly everything you need to create software, as long as you use their programming model, frameworks, tools, and management systems (Google App Engine). Which model a business chooses will have deep ramifications for how they can take advantage of cloud computing and because of this, most organizations will likely have multiple providers.
Is it time to declare the death of the enterprise data center? No, not quite yet, but it’s coming.
Let’s also make no mistake, most IT executives currently think very few cloud computing solutions are properly enterprise ready today. Though a number of them have come a good bit of the way towards
January 29th, 2009
Using Web 2.0 to reinvent your business for the economic downturn
We are very fortunate that, given the generational challenges we face today, we have tools that those that came before us could not possibly imagine.At this point it’s more than clear that 2009 will be a challenging year for a great many businesses. Most organizations these days are now actively engaged in activities that are taking a look at what they can do to make the best of the current economic situation.
Some business leaders will be looking at paring things back to the basics while a different sort will be looking at entirely new avenues to survive and thrive. The decisions we make now can greatly affect what happens to our organizations going forward.
The good news is that most enterprises actually have a fair number of compelling options right now if they are willing to think outside the box. While some might look at the social aspects of things like Web 2.0 as marginal subjects when things get tough, nothing could be further from the truth when it comes to the deeper implications of Web 2.0 in the enterprise. Many of the more transformational aspects of the 2.0 era now have extensive groundwork laid for them, are available in genuinely enterprise-ready solutions/pilots, and many have just been waiting for the right situation; the driving need for businesses to change and transform in the face of radically different business conditions.
Why is Web 2.0 particularly interesting right now for the enterprise? Web 2.0 has always been about making the most of the intrinsic power of the network and whatever is attached to it. This can be people (social computing and Enterprise 2.0), low-cost dynamic Web partners (open APIs and cloud computing), the world’s largest database of information, lightweight integration (mashups and Web-style SOA), or maximizing the value of the network itself (the network effects that everyone talks about), and much more. These collectively represent better, more efficient, and less expensive ways to accomplish things that we previously used to do without the network’s help or with methods that didn’t take advantages of how the network works.
Read this year’s Enterprise Web 2.0 predictions for 2009 for more perspective on this topic.
Fortunately, our businesses have become so thoroughly network connected that the inherent efficiency of most 2.0 approaches will now work just as well inside the firewall as outside, though there still remain a few differences.
So what does this mean to the harried businesses looking for new approaches to creating value in a chaotic and unpredictable time? How can this help in cutting costs or driving growth? Here are some practical ways that 2.0 approaches can help organizations grapple with the challenges of 2009. Though some of these have an IT slant, many of them are strategic approaches to Web 2.0 that most organizations can embrace across their lines of business to capture substantially better outcomes.
Note that the struggle with many of these, as with so much of Web 2.0, is that there is a major shift in control, a much higher level of transparency, and an openness that many businesses can be uncomfortable with. However, to organizations that are willing to overcome these largely political, cultural, and mindset challenges, significant opportunities are available for the taking, often for relatively modest investment.
Strategic use of Web 2.0 for growth and resilience
As always, this is not an exhaustive list, though it’s a good start, and only gives a sense of the possibilities. I pointedly left out important areas like mobile, despite prognostications like mine or others lately that it’s a hot subject; it is, it’s just not fundamentally transformative enough at this point. I am sure readers will contribute more below in TalkBack.
- Move to lower-cost online/SaaS versions of enterprise applications. - Face it, paying for yearly upgrades and new license fees is a major, recurring budget line item most organizations would like to eliminate now that most companies have a computer in front of every worker. Open source software is an option and is certainly cheaper up front, until the support costs and other factors come in. There are, in fact, numerous lower-cost options today for virtually any type of business software but unless it’s browser-delivered, or even better, externally hosted as SaaS, you can’t use the provider’s economies of scale to drive down the full range of costs from deployment of upgrades and technical support to hosting, backups, and management. In general, moving to SaaS for anything that isn’t strategic to the business is the best place to start if you’re trying out externally hosted apps for the first time.
Strategic applications might be more difficult to migrate to a SaaS model both from a customization and change management standpoint as well as from concerns about governance, reliability, compliance, and regulation. Retraining and data migration are a cost component in SaaS scenarios but are manageable in today’s increasingly online and data standardized world. How much will you actually save? The numbers vary, but recent reports say that moving to a SaaS version of your Customer Relationship Management (CRM) system will save the average firm
An internationally recognized enterprise architect and business strategist, Dion Hinchcliffe has been working for two decades with leading-edge methods to accelerate project schedules and raise the bar for software quality. You can follow Dion on Twitter.
See his full profile and disclosure of his industry affiliations.
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